WILLIAM O. O'DONNELL, INDIVIDUALLY, AND AS TRUSTEE, AND ELAINE P. O'DONNELL, HIS WIFE, AND WILLIAM M. LYNCH, JR., AND BONNIE L. LYNCH, HIS WIFE, AND GARDEN CITY BUILDERS, INC., A FLORIDA CORPORATION, APPELLANTS,
v.
WALTER F. NOVAK AND JEAN NOVAK, HIS WIFE, APPELLEES
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The court held that rescission was appropriate despite the impossibility of perfect restoration of the status quo, as an accounting could balance the equities, and that the defendants' misrepresentations prevented the plaintiffs from investigating the truth.
Appellees sued for rescission of a property exchange agreement after discovering a material misrepresentation regarding a mortgage release clause. The…
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The appellants were the defendants in a suit brought by the.appellees for rescission and accounting. The final decree, which is here appealed, made extensive findings of fact and ordered the rescission of an agreement whereby property was traded between the parties. In the agreement the appellee received real property in Seminole County and also an interest in a corporation, and appellants received an assignment of a 99-year lease on a motel in Dade County, Florida.
Both appellant, William O. O’Donnell, and the appellee, Walter F. Novak, are attorneys at law. The two attorneys, representing themselves and their associates, met in Mr. O’Donnell’s office and came to a tentative agreement. Thereafter, Mr. O’Donnell drew the agreement and mailed it to Mr. Novak. Mr. Novak added a separate paragraph which stated that approximately 242 lots owned by the corporation were “mortgaged for no more than $800 per lot without any further interest due thereon, with release clause.” The addendum was signed by Mr. Novak and by Mr. Lynch who was an associate of Mr. O’Donnell’s. At the trial, the only witnesses were Mr. Novak and Mr. O’Donnell. The court found as follows:
“1. That the equities of this cause are with the Plaintiffs.
“2. That the Addendum to the Agreement-Contract of Sale and purchase Exchange dated February 21, 1964 (Plaintiff’s Exhibit #2) is an integral part of the entire Agreement and was executed by the Defendant, WILLIAM M. LYNCH, JR., on behalf of and as agent for the Defendant, WILLIAM O. O’DONNELL.
“3. That said Defendant, WILLIAM M. LYNCH, JR., was at all times pertinent to the cause, an agent of the Defendant, WILLIAM O. O’DONNELL, did accept the Addendum to the Agreement of February 21, 1964 (Plaintiff’s Exhibit #2) and acted thereunder without Complaint.
“4. That the Plaintiffs made a dependent covenant in the Addendum, to-wit: that the property owned by the Defendant, GARDEN CITY BUILDERS, INC., was encumbered by a mortgage which contained a release clause of $800.00 per lot, without any further payment of interest due and that without said covenant the Plaintiffs would not have consummated the Agreement.
“5. That the Defendant, WILLIAM O. O’DONNELL, well knew of the non-existence of such $800.00 release clause but failed to so advise the Plaintiff and further, the Defendant, WILLIAM O. O’DONNELL, promised to attempt to secure an even lower release clause. That by the Defendant, WILLIAM O. O’DONNELL’S, words and actions the Plaintiffs were advised not to investigate the truth or falsity of his representations.
“6. That this conduct by Defendants prevented Plaintiffs from determining that there was in fact no release clause. A Court of equity cannot condone such misrepresentation of a material fact or allow Defendants to retain the fruits of this course of action.
*886 “7. That the Defendants did breach the dependent covenant as hereinabove stated and that said covenant was such an indispensable part of the Contract that the Contract would not have been made if said covenant was omitted.
“8. That the Plaintiffs acted diligently after becoming cognizant of the Defendants’ failure to perform under the dependent covenant and did timely offer to rescind the entire Agreement and to restore the status quo.
“9. That equity and good moral conscience dictate that the Agreement of February 21, 1964 be rescinded and that the parties be placed as closely as possible in a position of status quo as it existed before February 21, 1964.”
The appellant has presented seven points. Of these points, four challenge the court’s finding that the equities are with the plaintiffs. We do not further discuss these points because they do not present reversible error inasmuch as the record reveals competent substantial evidence to support the finding of the chancellor. See Board of County Com’rs v. F. A. Sebring Realty Co., Fla.1953, 63 So.2d 256; Carolina Lumber Company v. Daniel, Fla.App.1957, 97 So.2d 156; Cole v. Cole, Fla.App.1961, 130 So.2d 126.
Of appellants’ remaining points, the first urges that the chancellor erroneously entered a decree granting the prayer of rescission because it was impossible to restore the parties to the status quo. It is urged that rescission is inequitable because the appellants have made payments upon a mortgage on the motel. It is true that where there is a clear impossibility to restore the status quo, a court of equity will not ordinarily decree a rescission. Columbus Hotel Corp. v. Hotel Management Co., 116 Fla. 464, 156 So. 893 (1934); Smith v. Chopman, Fla.App.1961, 135 So.2d 438. Nevertheless, in the instant case it appears that an accounting between the parties has been ordered and that this accounting will balance the equities between the parties as to the payments made on the motel by the appellants.
The second of appellants’ remaining points is directed toward the appel-lees’ failure to investigate, as fully as caution would have seemed to indicate, prior to entering into the agreement. This point is fully answered by the chancellor’s finding-that the conduct of the defendants prevented the plaintiffs from determining the falsity of the statement regarding the release clause. Failure to investigate is not a. bar to equitable relief when it affirmatively appears that the party to benefit by the nondisclosure uses artifice to prevent the investigation. Board of Public Instruction of Dade County v. Everett W. Martin & Son, Inc., Fla.1957, 97 So.2d 21. Alepgo Corp. v. Pozin, Fla.App.1959, 114 So.2d 645.
The third point presented by appellants urges that there was an adequate-remedy at law. We recognize the rule that equity will not ordinarily intervene where-the law affords a full and complete remedy, but we find no reason to apply such a rule here because it is apparent that only equity could afford a full and complete remedy. Cf., Plasman v. Roach, Fla.1949, 43 So.2d 11. See also Ponce v. Demos, 159 Fla. 117, 31 So.2d 58 (1947).
Affirmed.
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Braman Dodge, Inc. v. Smith, 515 So. 2d 1053 (Fla. 3d DCA 1987)…2d 656 (Fla. 1965); 9 Fla.Jur.2d Cancellation Reformation and Rescission § 29 (1979). In granting rescission, the court should attempt to restore the parties to the status quo. Royal v. Parado, 462 So. 2d 849 (Fla. 1st DCA 1985); O’Donnell v. Novak, 183 So. 2d 884 (Fla. 3d DCA 1966). Where restoration to the status quo is impossible, however, a court may still grant rescission, provided the equities between the parties can be balanced. Mar-Char Enter., Inc., 451 So. 2d at 931, n. 1; Janeczek v. Embry, 330 So.…
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Mar-Char Enters., Inc. v. Charlie's THE Lakes Rest., Inc., 451 So. 2d 930 (Fla. 3d DCA 1984)…urchase-money mortgagee, reacquired possession and title at the foreclosure sale, and of the trial court's ability to order an accounting and fashion other ancillary remedies if necessary, we find no merit in this contention. See O’Donnell v. Novak, 183 So. 2d 884 (Fla.3d DCA 1966); Janeczek v. Embry, 330 So. 2d 837 (Fla.3d DCA 1976); Pirrello v. Poulter, 354 So. 2d 468 (Fla.3d DCA 1978); compare, Smith v. Chopman, 135 So. 2d 438 (Fla.2d DCA 1961).…
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Inversiones Alfa V v. Cedros Mgmt. Invs. LLC (Fla. 3d DCA 2026)…In the event restoration to the status quo is impossible, rescission may be granted if the court can balance the equities and fashion an appropriate remedy that would do equity to both parties and afford complete relief.”). 4 See O’Donnell v. Novak, 183 So. 2d 884, 886 (Fla. 3d DCA 1966) (concluding, in an action seeking the rescission of a property exchange agreement, that “only equity could afford a full and complete remedy”). ---PAGE 4--- agreement and awarded Cedros the return of its condominium propert…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Columbus Hotel Corp. v. Hotel Mgmt. Co., 116 Fla. 464 (Fla. 1934)
- Cole v. Cole, 130 So. 2d 126 (Fla. 1st DCA 1961)
- State v. Swanson, 116 Fla. 464 (Fla. 1934)
- Alepgo Corp. v. Pozin, 114 So. 2d 645 (Fla. 3d DCA 1959)
- Carolina Lumber Co. v. Daniel, 97 So. 2d 156 (Fla. 1st DCA 1957)
- The Bd. OF Pub. Instruction OF Dade Cnty. v. Everett W. Martin & SON, Inc., 97 So. 2d 21 (Fla. 1957)
- Ponce v. Demos, 159 Fla. 117 (Fla. 1947)
- Bd. of Cnty. Com'rs of Highlands Cnty. v. F. A. Sebring Realty Co., 63 So. 2d 256 (Fla. 1953)
- Smith v. Chopman, 135 So. 2d 438 (Fla. 2d DCA 1961)
- H. A. Knowlton and his wife v. Loraine M. Dean, 159 Fla. 98 (Fla. 1947)